BUSINESS REPORT

Business Report

Business Report

Analysis of the Industry

For a company to succeed in the global soft drink industry, it needs to achieve critical mass and develop a distribution system that is strategically aligned with its brands. Coke has already met these goals in 90% of the world's soft drink markets, while Pepsi has attained them primarily in the United Kingdom. Cadbury Schweppes' performance is expected to continue to suffer because it is still not aligned with its U.S. bottler network. For Coca-Cola, this means continuing to reinvest its cash flow from developed markets (51% of volume) into emerging markets (43% volume) and new markets (6% volume). For PepsiCo, this means focusing its international soft drink business on the emerging markets of China, India and Russia, the fountain channel opportunity in the U.K., and Olestra fat free snacks in the U.L. For Cadbury Schweppes, one could argue that management has been concentrating on taking the strong cash flows from U.K.

Coca-Cola is a recognizable emblem worldwide. From a chemist trial to an international enterprise, Coca-Cola has made the essential acquisitions and organizational alterations to rendezvous both clientele and employee demands. The organization has been adept to boost its wideness by inspiring the employees to rendezvous the trials with pays, advantages, and recognition. Though Coca-Cola is globally renowned for its beverages, its organizational heritage of evolving its human assets has permitted the company to elaborate its goods and geographical come to, conveying those beverages into the dwellings over the world (Barczak, 2003, 10).

Under this system, a bottler was allocated a regional market determined and coupled with exclusive rights for manufacturing and distribution. However, it was required to purchase concentrates and syrups from a single supplier, the owner of the franchise (franchisor), who owned the trademarks of a number of soft drinks. The franchisor policies defined pricing and gave support to the activities of marketing and brand promotion. However, in recent decades, major brand owners have bought most of their franchisees, so now there are a few independent bottlers left.

Growing concerns regarding obesity and consumer preference for healthier beverages forced the soft drink industry to seek new ways to exploit the market. The multinational soft drink industry is offering more and more drinks of other types and assortments. Many of these “new” drinks like sports drinks, energy drinks, bottled waters, PTE fruit drinks in single serving, sparkling waters, sodas and high-end tea, and ready to drink iced coffee promises that these drink not just quench the thirst; they provide extra energy and essential vitamins as well.

According to Euro monitor, the soft drink consumers increasingly opt for high-end products. Given the strength of the U.K. economy and rising disposable income of 6% in 2006, Americans are more inclined to spend more for products they previously considered as non-essential or luxury. This change in attitude of consumers who previously chose products based on price and are now opting for value-added products has affected all sectors.

Coco Cola Business Background

In 1886, a businessman Asa Griggs Candler made an offer ...